Q & A with Nick Forbes, leader of Newcastle council

Nick Forbes, the leader of Newcastle council, has been vocal about the pain that austerity is causing – and will continue to cause – to the city. He talks to New Start about the impact of another £100m cuts, investing to grow and building a fairer city.

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Q. How is austerity affecting the city and what do think is the way forward for councils?

A. The government’s ongoing austerity programme has been extremely difficult for Newcastle and is likely to be very challenging in the coming years. Our ‘heat mapping’ analysis in previous years has shown that places with relatively higher levels of disadvantage across the country have been impacted most by central government cuts.

We have responded to this in a number of ways including:

Involving our residents and partners much more in the difficult choices over services and spending facing the council;

Protecting the most vulnerable people and communities;

Exploring and taking forward more cooperative approaches to services and communities. This has included for example new approaches to local people taking over and running local assets such as libraries and getting much more actively involved in their neighbourhoods;

Developing innovative and ambitious approaches to public service reform, with an emphasis on early intervention; and,

Continuing to invest in growth so that people from all backgrounds can participate in economic opportunities

Q. You have recently signed a devolution deal for the area. What difference will it make to the local economy?

A. Devolution will transform our ability to make our job creation aims a reality, building on our reputation as an exporting powerhouse. It gives us access to more than £1.5bn in infrastructure investment, opens the way for further funding for major projects and gives us a much bigger say over business support. Our deal sees skills funding allocated in way which reflects the needs of the north east, rather than a Whitehall target. It also gives the region a much bigger say over enterprise zones.

Q. What are the main aims of local economic policy in the city?

A. Job creation underpins our every aim in the city, it is both as simple and as important as that. As a Labour council we set out to see social justice delivered across the city, and you cannot have social justice without access to more and better jobs. We want to grow the knowledge economy, improve skills, transform the city centre and ensure that the benefits of growth reach out to all residents.

We are creating the infrastructure for growth, be it building offices or bike lanes, and finding new ways to secure the investment opportunities that underpin thousands of jobs across the city. Look at the skyline in Newcastle and you see cranes because we are building for business. Look at the roads and you see we are investing in making it easier to get around this city, with £60m of improvements, such as making John Dobson Street a new cycle-friendly way into the city.

Q. Do you think that Newcastle’s local economy is resilient?

A. Our economy has undergone radical transformation since the days when shipbuilding and mining provided employment for tens of thousands of residents. We now have a modern, diverse, economy – which is 90% based on services. We have strong companies and sectors, including offshore engineering, professional services and the digital sector. Newcastle is home to the largest UK software company, Sage Plc.

Right now Newcastle is a growing city, but the recent downturn threatened to derail our aspirations, a situation we in this council were not prepared to let happen. Using powers I secured as part of Newcastle’s City Deal, the council borrowed to invest, creating construction jobs, preparing the city for the upturn and sending out a signal that we are a place to do business.

Q. Newcastle, like all of the UK’s core cities, has high levels of poverty and marginalised areas. Our primary economic model – boosting economic growth and waiting for it to trickle down – is not working for those areas. What approach should be taken?

A. Government cuts to councils, welfare, job creation and family support have all have enormous impacts on the people of Newcastle, and there is no getting away from that. We have done our best to shield the city from harm, but with £191m taken from the council so far and another £100m to go, our ability to fight back against disproportionate austerity measures is limited.

But I don’t agree with the premise of the question – we have seen unemployment fall sharply in our most deprived wards. Clearly there is far more work to do, and ensuring the benefits of growth reach all communities is a key priority for the council. That commitment was underlined in Newcastle’s Fairness Commission, in which I asked key individuals from across the city to advise on how the council can deliver more for those who do not immediately benefit from all our decisions. We have invested heavily in schemes – including a major housing scheme in Scotswood – to transform these areas. We have also introduced a Newcastle Living Wage which will ensure those at the bottom of the ladder are helped up, something we are actively encouraging businesses to follow.

Q. During our debate on ‘good’ local economics in the city one person described Newcastle as a ‘big-business dominated economy’. Do you think that big business is giving enough back to the city?

A.We are proud of our big businesses. They are big employers and make a big contribution to our city. Many also put an incredible amount back.

One of the transformations of our local economy in recent years has been the growth in smaller businesses, including start-ups and self employed. We’re supporting and nurturing this new entrepreneurial spirit by helping people with business support advice and easy access to register patents in our central library. Newcastle and Northumbria Universities and the quality of life here are both important factors in why more and more people are choosing to locate here.

We also have a proud reputation for corporate social responsibility. For example, the Sage Foundation has created a model of ‘2+2+2’: donating 2% of employee time each year, 2% of free cash flow and 2 of Sage’s smart technology products for any charity, social enterprise or non-profit organization. This is likely to be a leading approach nationally.

Another exemplar is the Reece Group, which recently took over the iconic Armstrong Works on the Scotswood Road. Their generosity has helped fund substantial projects in local schools and sports clubs.

Q. During our debate delegates from small business and the community sectors said that they are not represented enough in local decision-making. What more can be done to ensure that all communities are represented in local economic decisions that affect them?

A. Small businesses are the mainstay of the UK economy. We work hard to promote small business growth – including by providing incubation facilities, including at the Core at Science Central. And through running the Business and Intellectual Property Centre at the central library.

We also try to engage actively with the business community. Last quarter we had events and meetings with over 300 companies in the city. But I recognise that this is a small fraction of the business community and we need to constantly do more to engage.

Q. Do you think that GVA growth is an adequate measure of the Newcastle economy? If not, what else could you measure and what steps are being taken towards that?

A. GVA is the primary measure of an economy’s strength, and is therefore important to monitor. It also enables us to understand the local economy relative to the national picture. However, regional GVA is difficult to measure and is distorted by the relative intensity of headquarters based in London.